1) Jui Corporation’s Maintenance Department provides services to the company’s two
operating divisions–the Paints Division and the Stains Division. The variable costs of
the Maintenance Department are budgeted based on the number of cases produced by
the operating departments. The fixed costs of the Maintenance Department are budgeted
based on the number of cases produced by the operating departments during the
peak-period. Data appear below:
For performance evaluation purposes, how much Maintenance Department cost should
be charged to the Paints Division at the end of the year?
A.$273,000
B.$218,400
C.$169,000
D.$207,000
2) The Dillon Corporation makes and sells a single product. Overhead costs are applied
on the basis of standard direct labor-hours. The standard cost card shows that 5 direct
labor-hours are required per unit. The Dillon Corporation had the following budgeted
and actual data for March:
The variable overhead rate variance for March is:
A.$4,900 U
B.$11,060 U
C.$14,700 U
D.$17,300 U
3) The credits to the Work in Process account as a consequence of the raw materials
transactions in August total:
A.$56,000
B.$63,000
C.$0
D.$69,000
4) The net cash provided by (used in) financing activities for the year was:
A.$(22)
B.$3
C.$4
D.$(15)
5) Fabio Corporation is considering eliminating a department that has a contribution
margin of $30,000 and $60,000 in fixed costs. Of the fixed costs, $15,000 cannot be
avoided. The effect of eliminating this department on Fabio’s overall net operating
income would be:
A.a decrease of $30,000.
B.an increase of $30,000.
C.a decrease of $15,000.
D.an increase of $15,000.
6) Evans Corporation uses the weighted-average method in its process costing system.
This month, the beginning inventory in the first processing department consisted of 900
units. The costs and percentage completion of these units in beginning inventory were:
A total of 8,100 units were started and 6,800 units were transferred to the second
processing department during the month. The following costs were incurred in the first
processing department during the month:
The ending inventory was 60% complete with respect to materials and 10% complete
with respect to conversion costs.
Note: Your answers may differ from those offered below due to rounding error. In all
cases, select the answer that is the closest to the answer you computed. To reduce
rounding error, carry out all computations to at least three decimal places.
The cost per equivalent unit for materials for the month in the first processing
department is closest to:
A.$10.09
B.$11.18
C.$9.85
D.$8.89
7) The company’s average sale period (turnover in days) for Year 2 is closest to:
A.226.5 days
B.60.1 days
C.40.0 days
D.64.4 days
8) How many minutes of grinding machine time would be required to satisfy demand
for all four products?
A) 10,500
B) 10,700
C) 11,000
D) 10,800
9) Last year Javer Corporation had a net income of $200,000, income tax expense of
$74,000, and interest expense of $20,000. The corporation’s times interest earned was
closest to:
A.10.0
B.11.0
C.5.3
D.14.7
10) Nicklin Corporation is considering two alternatives that are code-named M and N.
Costs associated with the alternatives are listed below:
Required:
a. Which costs are relevant and which are not relevant in the choice between these two
alternatives?
b. What is the differential cost between the two alternatives?
11) The management of Bandle Corporation would like for you to analyze their repair
costs, which are listed below:
Management believes that repair cost is a mixed cost that depends on the number of
machine-hours. Using the least-squares regression method, the estimates of the variable
and fixed components of repair cost would be closest to:
A.$6.72 per machine-hour plus $55,230 per month
B.$6.80 per machine-hour plus $54,679 per month
C.$7.28 per machine-hour plus $51,389 per month
D.$14.66 per machine-hour plus $101,993 per month
12) The Khaki Corporation has the following budgeted sales data:
The regular pattern of collection of credit sales is 40% in the month of sale, 50% in the
month following sale, and the remainder in the second month following the month of
sale. There are no bad debts.
The budgeted cash receipts for April would be:
A.$350,000
B.$320,000
C.$313,000
D.$383,000
13) The company’s dividend yield ratio for Year 2 is closest to:
A.21.1%
B.2.6%
C.1.6%
D.14.7%
14) Harker Corporation uses the weighted-average method in its process costing
system. The first processing department, the Welding Department, started the month
with 16,000 units in its beginning work in process inventory that were 40% complete
with respect to conversion costs. The conversion cost in this beginning work in process
inventory was $29,440. An additional 59,000 units were started into production during
the month and 61,000 units were completed in the Welding Department and transferred
to the next processing department. There were 14,000 units in the ending work in
process inventory of the Welding Department that were 10% complete with respect to
conversion costs. A total of $246,400 in conversion costs were incurred in the
department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round
off to three decimal places.)
A.$4.176
B.$4.600
C.$3.375
D.$4.421
15) Acklac Corporation uses the weighted-average method in its process costing
system. This month, the beginning inventory in the first processing department
consisted of 700 units. The costs and percentage completion of these units in beginning
inventory were:
A total of 9,200 units were started and 8,300 units were transferred to the second
processing department during the month. The following costs were incurred in the first
processing department during the month:
The ending inventory was 75% complete with respect to materials and 15% complete
with respect to conversion costs.
Note: Your answers may differ from those offered below due to rounding error. In all
cases, select the answer that is the closest to the answer you computed. To reduce
rounding error, carry out all computations to at least three decimal places.
The cost per equivalent unit for conversion costs for the first department for the month
is closest to:
A.$26.64
B.$26.41
C.$27.97
D.$22.98
16) Rough Corporation’s total assets at the end of Year 2 were $1,247,000 and at the end
of Year 1 were $1,270,000. The company’s total liabilities at the end of Year 2 were
$512,000 and at the end of Year 1 were $550,000. The company’s total stockholders’
equity at the end of Year 2 was $735,000 and at the end of Year 1 was $720,000. The
company’s equity multiplier is closest to:
A.1.73
B.1.44
C.0.69
D.0.58
17) Hernande Corporation has provided the following data:
The company’s earnings per share for Year 2 is closest to:
A.$4.25 per share
B.$0.43 per share
C.$0.61 per share
D.$0.75 per share
18) Under the direct method, cost of goods sold adjusted to a cash basis would be:
A.$105,000
B.$125,000
C.$175,000
D.$155,000